34190 - Palestine Growth Capital Fund

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Summary of Investment Information

Project Number

34190

Company Name

The Palestine Growth Capital Fund C.V.

Date SPI Disclosed

Nov 8, 2013

Country

West Bank and Gaza

Region

Middle East

Projected Board Date

Dec 9, 2013

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Equity Portfolio Management

Industry

Manufacturing

Previous Events

Approved : Dec 17, 2013
Signed : May 7, 2014
Invested : Jun 18, 2014

Sector

Private Equity/Venture Cap Fund - Country

Project Description

The Palestine Growth Capital Fund (the "Fund") is a Palestine dedicated SME private equity fund, seeking minority and controlling positions in high-growth SMEs.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	5.0

Development Impact

1) Job creation: SMEs are the major sources of employment in West Bank and Gaza. Through the Fund's investment in SMEs, much needed growth capital will be injected into the system to foster employment creation.
2) Access to finance: The Fund will provide long term risk capital, which is very difficult for the local SMEs to obtain.
3) Introducing new sources of finance: Establishment of funds in the region introduces additional and complementary sources of financing to the financial markets which are largely dominated by banks.
4) Promoting sustainable growth: The Fund will play an active role in strengthening the SME's governance and transparency. Through hands-on involvement, operating efficiencies of the portfolio companies will be improved, thus promoting growth and sustainability.

1) Support for a first time team in frontier markets: IFC will provide support for a management team targeting SMEs in Palestine for the first time, in a conflict affected frontier market.
2) Restoring investor confidence: IFC's participation will enhance investor confidence to channel more stable institutional capital flows to a conflict-affected country that typically has difficulty attracting equity investors. This is a much needed role for post-crisis MENA countries.
3) Environmental and social: IFC will advocate the implementation of E&S standards and continue its stewardship in that area.

E&S Category Rationale / Risks and Mitigation

The project is an equity investment of US$ 3 million to Palestine Growth Capital Fund C.V. The Fund will provide equity capital for growth and expansion along with professional management advice and operational guidance to a diversified portfolio of companies in the food and beverage, education, healthcare, finance and insurance, crop production, chemicals, and telecommunications sectors. The expected portfolio will largely be comprised of business activities that have limited adverse environmental and social risks and impacts that are few in number, site specific, largely reversible and can be readily addressed through mitigation measures. The project has therefore been categorized as FI-2 according to the IFC Sustainability Framework.

In accordance with IFC's Access to Information Policy, IFC will periodically disclose the names, locations and sectors of sub-projects that have been supported by IFC investments through private equity funds, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of January 1, 2017.

Investee	Country of Investment	Sector
Anoud	West Bank and Gaza	Elementary and Secondary Schools
Thimar Palestine	West Bank and Gaza	Fruits and Vegetables

The key risk is the ability of the fund to identify and manage the environmental and social risks associated with its investment activities. The Fund adopts Abraaj Environmental and Social Management System (ESMS), outlining the procedures, responsibilities and tools for undertaking E&S risk management of its investment activities and E&S related due diligence, which is mostly in line with IFC requirements. The ESMS will be revised as per IFC recommendations.

Contacts

For Inquiries About the Project, Contact

Abraaj Capital
Dubai International Financial Centre (DIFC)
Gate Village 8, 3rd Floor
PO Box 504905
Dubai, United Arab Emirates
Telephone: +971 4 506 4400
Fax: +971 4 506 4600

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Establish SEMS
Staff Training
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